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February 1, 1998

AVANT! ACCUSES CADENCE OF INSIDER DEALING AND RACKETEERING

By CBR Staff Writer

Avant! Corp, the company found guilty by a San Francisco court of stealing software code from arch rival Cadence Design Systems Inc (CI No 3,273) has had its day in court and accused Cadence of insider dealing, racketeering and anti trust violations. Avant! alleged in a court hearing on Thursday that Cadence and its former president and chief executive Joe Costello had been trying to force the smaller company out of business, because Avant!’s technology was more advanced. Fremont, California-based chip-design software company Avant! claims Costello hatched an anti-competitive scheme against it, which is still in place today. The court heard that Cadence filed false declarations by an employee and an expert who misrepresented the analyses of Avant! products, which lead to a misleading article being sent to some 10,000 existing and prospective Avant! customers in Japan. Five Avant! executives were marched off to the Santa Clara county jail last April and charged with conspiracy and theft from Cadence (CI No 3,143). But Avant! alleges that Cadence employees, including Costello, who left the company in November to take up a position at Knowledge Universe LLC (CI No 3,273), set about executing insider trading that lead to panic sales of Avant! stocks and a subsequent cashing in on the profits. In their papers, Avant! states Cadence and Costello violated the federal antitrust laws, committed securities fraud and engaged in racketeering and false advertising. Costello and his then girlfriend and now wife, Michele Gerstel Perrotta have been accused of shorting 500 Avant! shares. Lastly, Avant! alleges Cadence has exercised its monopoly power in a series of pricing schemes that positioned its products below the legally appropriate measure of its costs to produce them.

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